Definition: An Agrement is a legal arrangement between two parties, with its inception and operation underpinned by an understanding between them that they will perform certain specified acts in the conduct of business or commerce. Whether the bargain is formalized in writing or manifested in verbal form, the essential character of the agreement is that it is based on a bargain between equals. The parties might proceed with a bargain because they believe it is best for themselves or because they have been impressed by the other party’s outstanding general reputation.
An agreement is something that is reached through mutual understanding and respect. In another sense, an agreement is something that one party proposes to another as an alternative to a course of action that he would have rejected if he knew the other would accept it. Agreements may be formal (treaty), implicit (conduct), or explicit (promise). The choice of words is important because words have power. A formal agreement may be more persuasive to some than an implicit or explicit one.
Elements of Agreement
The basic framework of the situation is that the proposer represents the potential offeror, and the offeree represents the potential offeree. Agreeing to a bargain involves two steps: the proposer makes a proposal, and the offeree considers the offer and decides whether to accept or decline. All offers are made verbally and are subject to further negotiation during the trip. In some deals, it may be deemed satisfactory to pay the higher price because of the perceived good faith by both parties; in other cases, the offer is refused because of perceived misdeeds by one party
When an offer is made and the customer refuses it, the offer is rejected and cannot be accepted again. Acceptance implies an intent to fulfill the obligation contained in the offer, even if he thinks that there is no chance of fulfillment. The only condition that should be satisfied to be considered accepting an offer is if the offeree has specifically told you that he/She agrees to your offer.
A person’s acceptance of a proposition means that he gives consent to the bargain or offer on the terms and conditions set by the offeror. A person may not accept an offer even when it has an offer to sell something. In offer /take case law, a person’s acceptance of a proposition is critical in determining whether an offer is valid.
An agreement is a decision that is reached between people intending to act in respect of the interests of third parties, whether or not those interests are clearly defined. Thus, even though there may be no apparent conflict between the parties, they may not be fulfilled if an agreement exists.